What a Ch&aacute;vez Win Means in Venezuela and for U.S. Policy

To no one's surprise, Venezuela's authoritarian president, Hugo
Chávez swept to re-election victory on December 3.
Chávez clearly intends to turn Latin America and the
Caribbean toward authoritarianism and closed markets. To counter
those aims, the United States must ratify promised trade ties with
allies. It must enhance security cooperation to counter new threats
and check any potential arms race advanced by Chávez.
Finally, America must strengthen support for fragile democratic and
market institutions to keep other countries in the region from
sliding toward economic decline, strongman rule, and conflict.

Tilted Contest

Thanks to unfair electoral practices, Chávez handily
defeated challenger Manuel Rosales, governor of Zulia State, 61
percent to 38 percent. Before the vote, Chávez lavished oil
revenues on social spending and raised government workers'
salaries. Chávez loyalists ran the National Electoral
Council and made exclusive use of state resources to register
hundreds of thousands of new voters. And while Chávez had
unlimited access to the media through state television and radio
and the ability to pre-empt commercial broadcasting, rivals were
limited to a few minutes of advertising per day on private
media.

Fifty-seven percent of respondents to an Associated Press poll
said they feared retaliation if they voted against Chávez.
Names of 3 million citizens who signed a petition for his recall in
2004 have circulated on CDs in Caracas, spreading fear of
reprisals. Energy Minister Rafael Ramírez even warned
employees of the state oil company that they were obligated to
support Chávez's re-election "100 percent." And on election
day, fingerprint scanners scared off some opposition
supporters. While voting machines seemed to work, the
electoral process was unfair.

Lurch to the Right

Despite socialist rhetoric and a re-election victory dedicated
to Cuban dictator Fidel Castro, Chávez's presidency marks a
regressive shift in Venezuelan politics. Authoritarian or
caudillo rule is a relic of Spanish colonialism. It mimics
the harsh, centralized control imposed by conquerors and depends on
rent-seeking to extract wealth from cheap labor and available
resources. Caudillos ruled Venezuela until 1958, when a pact
between two political parties to share power brought in a
civilian-elected president.

Mounting debt, due to excessive social spending and declining
oil prices, weakened the pact, allowing former coup plotter and
cashiered army officer Hugo Chávez to win the presidency in
1998 on promises to clean up government. Instead, he had the
constitution rewritten to expand his powers and time in office,
elevated military cronies to key posts, and introduced laws to
constrain commerce, muzzle the media, and expropriate property.
Corruption metastasized, and Venezuela is now one of the most
violent countries in the hemisphere.

Chávez has not yet adopted the totalitarianism of mentor
Fidel Castro. But during the 2006 campaign, he spoke of creating a
single revolutionary party and of amending the constitution to
allow his unlimited re-election. He also suggested replacing local
currency with time-limited coupons that could only be spent in the
communities where they were earned.

International Agenda

Through oil wealth and Russian arms, Mr. Chávez seeks the
kind of regional hegemony that Cuba's Fidel Castro once tried to
achieve. Venezuela's activist embassies recently aided populist
nationalists running to lead Peru, Nicaragua, and Ecuador. Bolivian
President Evo Morales reportedly has Cuban security advisers, and
Venezuelan pilots fly his helicopter. In October Chávez
warned, "Venezuela will not keep its arms crossed" if the Bolivian
government is threatened from outside or within.

Filling a vacuum left by a United States preoccupied with the
Middle East, Chávez has bought Argentine debt and offered
neighbors many times the $1.5 billion in foreign aid the United
States distributes. After urging the Organization of Petroleum
Exporting Countries (OPEC) to limit exports and drive up oil
prices, he has given subsidies to needy neighbors in exchange for
loyalty. And he opposes the U.S. free trade agenda with his
Bolivarian Alternative for the Americas (ALBA), a notional aid
scheme to be financed by oil.

Chávez cut military ties with Washington in 2004 and is
purchasing fighter-bombers, helicopters, 100,000 rifles, and an
arms factory from Russia. Officials claim the equipment is needed
to replace outdated inventories. Such arms could be used to
intimidate neighbors. Venezuela has an adversarial relationship
with Colombia, which is struggling to rein in narco-terrorists who
are Chávez's allies. Until his capture in 2004,
Revolutionary Armed Forces of Colombia commander Rodrigo Granda
lived in Caracas with Venezuelan identity and travel documents.

Cloudy Future

Increasingly, Venezuela's economy depends on high oil prices.
Exchange controls and new regulatory restraints have forced
thousands of businesses to fold, reducing economic diversity.
Foreign investment is a fifth of what it was in 1998. Even with
growing trade surpluses from oil, the government seems to spend
more than it takes in. Despite lavish social programs, Venezuela's
official poverty figures rose from 44 percent to 55 percent between
1998 and 2004. The government has since abandoned "neoliberal"
methods of counting the poor.

Ironically, Venezuela's economy remains highly dependent on
selling oil to the United States, which accounts for about 60
percent of its exports. Chávez has tried to limit private
participation in Venezuela's petroleum industry, seeking capital
from state companies in Iran and China instead. But their expertise
and minimal investments may not be enough to counter overall
declines in Venezuelan oil production.

Damage Control

Despite Chávez's threats to cut oil exports to the United
States, U.S.-Venezuela commerce will continue out of necessity for
both countries unless Venezuela directly threatens the United
States or a Rio Treaty signatory. Still, Chávez may be
expected to incrementally destabilize democratic neighbors where
poverty and discontent provide opportunities.

To promote democratic space in Venezuela and minimize potential
threats to America, the United States should:

Ignore Chávez's insults and confine discourse to
democratic principles, assessments of institutional performance,
and incentives for collaboration to avoid a propaganda war;

Help sustain Venezuelan civil society by maintaining
person-to-person contacts such as exchanges and public diplomacy
outreach programs; and

To deter Chávez from destabilizing adventures in Latin
America, the United States must:

Consolidate promised free trade agreements with allies.
This is what more democratic neighbors want instead of stop-gap aid
programs. Congress should approve accords already signed with
Colombia and Peru and support U.S. efforts to negotiate a pact with
Uruguay.

Enhance security cooperation that has declined since the
end of the Cold War to counter new threats, such as transnational
crime, and boost scrutiny of Venezuela's diplomatic and military
actions.

Strengthen U.S. support for democratic and market
institutions to keep poor countries in the region from sliding
toward economic decline and, ultimately, authoritarianism.

Conclusion

Like Fidel Castro, Hugo Chávez is a throwback to Latin
America's authoritarian past. His loyalists represent a new
oligarchy running a manipulated democracy. Unless leaders like
Manuel Rosales develop a viable opposition and outside scrutiny
deters Chávez's more dictatorial inclinations, the United
States and Venezuela's democratic neighbors may get stuck
rehabilitating a bankrupt, broken society and its satellite states
when the caudillo juggernaut finally goes bust.

Stephen
Johnson is Senior Policy Analyst in the Douglas and Sarah
Allison Center for Foreign Policy Studies at The Heritage
Foundation.

Rep. Peter Roskam (R-IL) says it's "a great way to start the day for any conservative who wants to get America back on track."

Sign up to start your free subscription today!

Sorry! Your form had errors:

About The Heritage Foundation

The Heritage Foundation is the nation’s most broadly supported public policy research institute, with hundreds of thousands of individual, foundation and corporate donors. Heritage, founded in February 1973, has a staff of 275 and an annual expense budget of $82.4 million.

Our mission is to formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense. Read More